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Copper potential of KSK COW - Kalimantan Gold Corporation Limited

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<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> the <strong>Kalimantan</strong> Surya Kencana<br />

Contract <strong>of</strong> Work, Central <strong>Kalimantan</strong>, Indonesia<br />

Peter J. Pollard<br />

Pollard Geological Services Pty. Ltd.<br />

7 Jillinda Place, The Gap<br />

Queensland 4061, Australia<br />

peter@peterpollard.com<br />

January 2008


2<br />

___________________________________________________________________________________<br />

Executive Summary<br />

The <strong>Kalimantan</strong> Surya Kencana Contract <strong>of</strong> Work in Central <strong>Kalimantan</strong> contains several<br />

porphyry copper-gold systems where recent exploration by Oxiana <strong>Limited</strong> in joint venture<br />

with <strong>Kalimantan</strong> <strong>Gold</strong> <strong>Corporation</strong> <strong>Limited</strong> included geological mapping, reprocessing <strong>of</strong><br />

geophysical data and drilling 16 diamond drill holes. Many holes contained no significant<br />

copper mineralization and thereby downgraded parts <strong>of</strong> several prospects. Oxiana <strong>Limited</strong><br />

withdrew from the joint venture in late 2007.<br />

Of the sixteen new holes, five were drilled in the Main Zone at Beruang Kanan. All<br />

encountered low-grade copper mineralization, with the best intersections being in KBK0021<br />

with 44m @ 0.58% Cu from 16.6m and 41.7m @ 0.46% Cu from 147m. The drilling did not<br />

test the deeper part <strong>of</strong> the main target previously proposed by Leach (2001) in the vicinity <strong>of</strong><br />

BK09 and the mineralization is therefore open in this area. Similarly, two holes drilled in the<br />

South Zone at Beruang Kanan have not tested the main part <strong>of</strong> the coincident IP chargeability<br />

and copper in soil anomalies defined by previous work by Geiger et al. (2005).<br />

One hole drilled in Central Baroi targeted a conceptual geophysical and geochemical target<br />

but failed to intersect significant mineralization. Another hole was drilled in a base metal vein<br />

zone at Far East Baroi and confirmed earlier interpretations that there is no shallow porphyrystyle<br />

mineralization in this area. Two further targets in Central Baroi which were supported<br />

by the reprocessed IP data were not drilled. These remain targets for future exploration.<br />

Three holes were drilled at the Mansur prospect, two in the area <strong>of</strong> the main copper in soil<br />

anomaly and one targeting an IP anomaly further south. The holes returned no significant<br />

mineralization and indicate that it is highly unlikely an economic porphyry copper system is<br />

present at Mansur.<br />

Oxiana <strong>Limited</strong> drilled one hole at the Beruang Tengah prospect targeting high copper in rock<br />

chips as well as mapped phyllic alteration and milled breccia. The hole contained no<br />

significant copper mineralization and it was concluded that the prospect had no room to host a<br />

near-surface economic porphyry copper deposit. The prospect has been delineated by rock<br />

chip sampling <strong>of</strong> creek outcrops, but veining and surface limonite development extend<br />

beyond this area, particularly to the south and west. Although the recent drilling downgraded<br />

the current prospect area, there appears to be scope for further work at Beruang Tengah<br />

possibly involving an extended soil geochemical survey with IP and ground magnetics to help<br />

delineate further targets.<br />

No new drilling was carried out at Tumbang Huoi where the presence <strong>of</strong> copper in soil<br />

anomalies and widespread potassic alteration (biotite ± magnetite) in earlier drill holes<br />

suggest that this prospect may have some <strong>potential</strong>. Further work involving IP and ground<br />

magnetic surveys over the main copper in soil anomalies may help to delineate any sulphiderich<br />

zones for further work.<br />

Several other prospects and geochemical anomalies (e.g. Mamuring 1 and Rinjen) within the<br />

<strong>KSK</strong> <strong>COW</strong> have received limited exploration attention. These require collection <strong>of</strong> basic<br />

geological data, geochemical data and mineralized samples in order to allow their <strong>potential</strong> to<br />

be assessed. The <strong>potential</strong> for high-grade skarn-style copper-gold mineralization at Mamuring<br />

should be investigated.<br />

Although the recent work resulted in downgrading <strong>of</strong> some prospects, further work within the<br />

<strong>KSK</strong> <strong>COW</strong> is warranted to assess the <strong>potential</strong> <strong>of</strong> several untested porphyry copper targets.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


3<br />

___________________________________________________________________________________<br />

Table <strong>of</strong> Contents<br />

Executive Summary.......................................................................................................2<br />

Table <strong>of</strong> Contents...........................................................................................................3<br />

Statement <strong>of</strong> experience.................................................................................................4<br />

Introduction....................................................................................................................5<br />

Approach........................................................................................................................5<br />

Geological setting ..........................................................................................................5<br />

Porphyry copper prospects.............................................................................................8<br />

Beruang Kanan...............................................................................................................9<br />

Oxiana <strong>Limited</strong> drilling............................................................................................13<br />

Discussion................................................................................................................14<br />

Baroi.............................................................................................................................16<br />

Oxiana <strong>Limited</strong> Drilling...........................................................................................16<br />

Discussion................................................................................................................17<br />

Mansur .........................................................................................................................18<br />

Oxiana <strong>Limited</strong> drilling............................................................................................18<br />

Discussion................................................................................................................19<br />

Beruang Tengah...........................................................................................................20<br />

Oxiana <strong>Limited</strong> drilling............................................................................................20<br />

Discussion................................................................................................................21<br />

Tumbang Huoi .............................................................................................................22<br />

Conclusions..................................................................................................................23<br />

References (including uncited reports) ........................................................................24<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


4<br />

___________________________________________________________________________________<br />

Statement <strong>of</strong> experience<br />

Dr Peter Pollard is a consulting economic geologist with more than 20 years<br />

experience. He holds a PhD from James Cook University, Australia and is a Member<br />

<strong>of</strong> the Australasian Institute <strong>of</strong> Mining and Metallurgy and a Fellow <strong>of</strong> the Society <strong>of</strong><br />

Economic Geologists.<br />

Dr Pollard has consulted widely on porphyry copper-gold and iron oxide copper-gold<br />

deposits. He has worked on some <strong>of</strong> the world’s major porphyry copper-gold deposits<br />

including Grasberg (Indonesia), Escondida Norte (Chile) and Oyu Tolgoi (Mongolia).<br />

In addition, he has consulted on porphyry exploration programs in Australia, China,<br />

Indonesia, Iran, Kazakhstan, Mongolia, Peru, U.S.A. and Vietnam.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


5<br />

___________________________________________________________________________________<br />

Introduction<br />

At the request <strong>of</strong> Mr Rahman Connelly <strong>of</strong> <strong>Kalimantan</strong> <strong>Gold</strong> <strong>Corporation</strong> <strong>Limited</strong>, the<br />

author spent 4 days in Palangkaraya, <strong>Kalimantan</strong> reviewing the results <strong>of</strong> recent<br />

exploration within the P.T. <strong>Kalimantan</strong> Surya Kencana Contract <strong>of</strong> Work (<strong>KSK</strong><br />

<strong>COW</strong>; Figs 1 and 2). The aim <strong>of</strong> this work was to evaluate the copper <strong>potential</strong> <strong>of</strong> the<br />

<strong>COW</strong> following the 2007 exploration program conducted by Oxiana <strong>Limited</strong> in joint<br />

venture with <strong>Kalimantan</strong> <strong>Gold</strong> <strong>Corporation</strong> <strong>Limited</strong>.<br />

Approach<br />

Oxiana <strong>Limited</strong> undertook an exploration program within the <strong>KSK</strong> <strong>COW</strong> in 2007<br />

with a target <strong>of</strong> +300 million tonnes at 1% Cu. The exploration program involved<br />

geological mapping, re-logging <strong>of</strong> drill core and reprocessing <strong>of</strong> geophysical and<br />

geochemical data as well as drilling 16 new diamond drill holes in the Beruang<br />

Kanan, Beruang Tengah, Baroi and Mansur prospects. The drill holes mostly returned<br />

low grades <strong>of</strong> copper and gold and Oxiana subsequently withdrew from the joint<br />

venture. The current review considered the Oxiana <strong>Limited</strong> data as well as previous<br />

exploration data on these four prospects in order to assess their copper <strong>potential</strong>. In<br />

addition, the copper <strong>potential</strong> <strong>of</strong> the Tumbang Huoi prospect is also briefly<br />

considered.<br />

Geological setting<br />

The <strong>KSK</strong> <strong>COW</strong> is situated within the mid-Tertiary <strong>Kalimantan</strong> volcanic arc that hosts<br />

a number <strong>of</strong> porphyry copper-gold deposits and prospects including Mamut, Rina,<br />

Manto-Tebihi and those within the <strong>KSK</strong> <strong>COW</strong>. In addition, several low sulphidation<br />

epithermal deposits are present including Kelian, Indo Muro, Masuparia, Gunung Mas<br />

and Jelai-Mewet.<br />

Porphyry copper-gold mineralization in the <strong>KSK</strong> <strong>COW</strong> is associated with a number <strong>of</strong><br />

probable Oligocene age intrusions that were emplaced at the junction between<br />

Mesozoic metamorphic rocks to the south and accreted Lower Tertiary sediments to<br />

the north (Geiger and Prasetyo, 2004). Structures in the region are dominated by<br />

northeast-striking faults that are interpreted to be arc parallel or accretionary faults<br />

(Geiger and Prasetyo, 2004). Subsidiary northwest-trending arc normal or transfer<br />

faults cross-cut the northeast structures and the intrusions have commonly been<br />

emplaced within dilational settings at the intersections <strong>of</strong> these major structural<br />

features (Geiger and Prasetyo, 2004).<br />

Large circular features that are evident on satellite images commonly coincide with<br />

the mid-Tertiary intrusions and are interpreted to be volcanic collapse features (Geiger<br />

and Prasetyo, 2004). These host many <strong>of</strong> the porphyry prospects within the <strong>KSK</strong><br />

<strong>COW</strong>.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


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___________________________________________________________________________________<br />

Figure 1. Location <strong>of</strong> the <strong>Kalimantan</strong> Surya Kencana Contract <strong>of</strong> Work within the<br />

<strong>Kalimantan</strong> magmatic arc.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


7<br />

___________________________________________________________________________________<br />

Figure 2. Principal prospects and geochemical anomalies within the <strong>Kalimantan</strong><br />

Surya Kencana Contract <strong>of</strong> Work.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


8<br />

___________________________________________________________________________________<br />

Porphyry copper prospects<br />

Previous exploration in the <strong>KSK</strong> <strong>COW</strong> has used a model <strong>of</strong> porphyry copper systems<br />

in the SW Pacific (Corbett and Leach, 1998; Geiger et al., 2002) as a general guide.<br />

The main porphyry prospects within the <strong>KSK</strong> <strong>COW</strong> have been placed within this<br />

general framework by Geiger et al. (2002) based on the observed alteration features<br />

and proximity <strong>of</strong> porphyry intrusions (Fig. 3). This model does not attempt to identify<br />

the size <strong>of</strong> porphyry systems in terms <strong>of</strong> surface or other dimensions and it is not clear<br />

whether an ‘economic porphyry system” in the <strong>KSK</strong> <strong>COW</strong> would be a broad<br />

intrusion-centered body <strong>of</strong> mineralization at kilometre scale or a narrow, structurally<br />

controlled zone <strong>of</strong> high-grade mineralization at 100-400m scale in plan. Concepts<br />

concerning room available to host a deposit need to be considered in this light as<br />

recent exploration successes at Ridgeway (Australia) and Oyu Tolgoi (Mongolia)<br />

have highlighted the occurrence <strong>of</strong> porphyry systems with limited surface expression<br />

linked to narrow dyke- or pencil-like intrusions.<br />

Figure 3. General model <strong>of</strong> Southwest Pacific porphyry copper systems (modified<br />

from Geiger et al., 2002).<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


9<br />

___________________________________________________________________________________<br />

Beruang Kanan<br />

The Beruang Kanan prospect is located within a 10-12 km wide circular feature near<br />

the intersection <strong>of</strong> regional NE and NNW-trending structures (Fig. 4). Alteration and<br />

mineralization at Beruang Kanan extends over an area <strong>of</strong> some 16 km 2 and is hosted<br />

within dacite tuff and volcaniclastic rocks. Soil geochemistry and geophysical data (IP<br />

and ground magnetics) have delineated three main prospects, the Main, South and<br />

West zones.<br />

Figure 4. Interpreted circular features, domes, faults and dilation zones in the<br />

southeastern part <strong>of</strong> the <strong>KSK</strong> <strong>COW</strong> (after Murphy, 2003).<br />

The Main Zone is an area <strong>of</strong> coincident copper, gold and molybdenum anomalism in<br />

soils and is associated with strong phyllic alteration (Figs. 5-7). Leach (2001) reported<br />

that alteration is zoned from deeper to shallower levels: chlorite-sericite-quartz-pyritechalcopyrite<br />

→ quartz-sericite-pyrite-chalcopyrite-bornite → quartz-dickite/kaolinitepyrite-chalcopyrite-bornite-tennantite<br />

→ quartz-alunite-pyrite-barite-enargite. Leach<br />

(2001) also reported an apparent zonation from chlorite-sericite-rich assemblages at<br />

deeper levels to the east to advanced argillic assemblages at shallow levels to the<br />

west, suggesting a fluid source deeper and to the east.<br />

Previous drilling in the Main Zone has intercepted <strong>potential</strong>ly economic grades <strong>of</strong><br />

copper mineralization over considerable down hole intervals (Table 4). Near surface<br />

mineralization is dominated by supergene chalcocite and minor chrysocholla and<br />

malachite, while at deeper levels the hypogene mineralization is dominated by<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


10<br />

___________________________________________________________________________________<br />

chalcopyrite ± bornite. Leach (2001) constructed cross sections highlighting the<br />

alteration, grade distribution and IP chargeability features along line 10050N (Figs. 6-<br />

8) and considered two sources for the mineralization:<br />

1. copper mineralization related to a breccia pipe inferred from milled breccia<br />

observed in BK8 (Fig. 5), or<br />

2. copper mineralization derived from another source, perhaps represented by a<br />

high chargeability anomaly.<br />

Table 1. <strong>Copper</strong> grades in earlier drill holes from the Beruang Kanan prospect (from<br />

Geiger et al., 2005).<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


11<br />

___________________________________________________________________________________<br />

Figure 5. Interpretive cross section with drill holes projected on to line 10050N<br />

showing the distribution <strong>of</strong> alteration and sulphide mineral types (from Leach, 2001).<br />

Figure 6. Interpretive cross section with drill holes projected on to line 10050N<br />

showing the distribution <strong>of</strong> copper grades (from Leach, 2001).<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


12<br />

___________________________________________________________________________________<br />

Figure 7. Interpretive cross section with drill holes projected on to line 10050N<br />

showing the distribution <strong>of</strong> chargeability anomalies (from Leach, 2001).<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


13<br />

___________________________________________________________________________________<br />

Oxiana <strong>Limited</strong> drilling<br />

Oxiana drilled 10 holes at Beruang Kanan (Fig. 8) where reprocessing <strong>of</strong> the IP data<br />

led them to believe that there was a strong correlation between near-surface<br />

conductive and chargeable zones and copper in drill holes and soils (Stewart et al.,<br />

2007).<br />

Drill hole Location Azimuth Inclination Length (m)<br />

KBK0019 South Zone 090 o -60 o 303.65<br />

KBK0200 Main Zone 090 o -70 o 304.90<br />

KBK0021 Main Zone 270 o -70 o 636.60<br />

KBK0022 Main Zone 270 o -65 o 451.70<br />

KBK0023 Main Zone 090 o -70 o 601.90<br />

KBK0024 South Polymetallic 090 o -70 o 305.00<br />

KBK0025 South Polymetallic 090 o -90 o 393.20<br />

KBK0026 Main Zone 270 o -50 o 454.70<br />

KBK0027 West Zone 070 o -60 o 278.70<br />

KBK0028 South Zone 090 o -70 o 151.30<br />

Table 2. Oxiana <strong>Limited</strong> drill holes at the Beruang Kanan Prospect (data from<br />

Stewart et al., 2007).<br />

Drill hole From (m) To (m) Cu (%) Au (g/t)<br />

KBK0020 9.6 52.0 0.12<br />

KBK0021 16.6 60.6 0.58<br />

KBK0021 147 188.7 0.46<br />

KBK0024 95.5 136.0 0.51<br />

KBK0028 0.0 61.0 0.21<br />

KBK0028 10.0 14.5 7.7<br />

Table 3. Significant intercepts in Oxiana drill holes at the Beruang Kanan Prospect<br />

(data from Stewart et al., 2007)..<br />

Five holes were drilled in the Main Zone and most targeted chargeability anomalies<br />

suspected to represent either shallow supergene mineralization or deeper, hypogene<br />

mineralization (e.g. KBK0021). In addition, one hole (KBK0020) tested the<br />

possibility that a buried porphyry could be represented by a low chargeability zone<br />

((Stewart et al., 2007).<br />

In the South Zone, two holes were sited in an area <strong>of</strong> high density quartz-sulphide<br />

stockwork veining with anomalous gold, molybdenum and copper soil geochemistry.<br />

Hole KBK0028 intersected 61m @ 0.21% Cu from surface, including 4.5m @ 7.7g/t<br />

Au from 10m. In the South Polymetallic Zone (Rawa Zone), two holes tested the base<br />

metals zone with limited success. One hole was drilled in the West Zone where an<br />

extensive area <strong>of</strong> anomalous copper in soil geochemistry is present. The drill hole did<br />

not intersect any significant mineralization and the last 100 metres was in postmineral<br />

porphyry.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


14<br />

___________________________________________________________________________________<br />

Figure 8. Geology <strong>of</strong> the Beruang Kanan prospect showing the distribution <strong>of</strong> drill<br />

holes (modified from Stewart et al., 2007).<br />

Discussion<br />

Of the two holes in the Main Zone which returned significant intersections (Table 3),<br />

one was drilled in a high chargeability zone (KBK0021) and the other in a low<br />

chargeability zone (KBK0020). This must raise a question over the inferred<br />

relationship between chargeability and copper mineralization in this area and suggests<br />

that interpretations based solely on the IP data must be treated with caution.<br />

The principal porphyry target in the Main Zone delineated by Leach (2001) was not<br />

tested by the recent drilling and the mineralization still remains open at depth in the<br />

area near BK09. In order to test this target, holes would need to be sited east and<br />

northeast <strong>of</strong> BK09 and drilled to the west at -50-60 o .<br />

In the South Zone, KBK0028 appears to have been drilled some 200 metres south <strong>of</strong><br />

the main soil geochemistry and IP target described by Geiger et al. (2005)(see fig. 9).<br />

The main target zone therefore remains untested.<br />

Strong clay-pyrite alteration is present in the west zone but the source <strong>of</strong> copper and<br />

the style <strong>of</strong> any copper mineralization are not known. Further work could be<br />

undertaken to identify the style(s) <strong>of</strong> mineralization. This could involve mapping<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


15<br />

___________________________________________________________________________________<br />

within the copper anomalous areas as well as outcrop and boulder sampling. If<br />

positive indications for the presence <strong>of</strong> porphyry style mineralization are found, then<br />

it may be considered worthwhile drilling the western part <strong>of</strong> the deep chargeability<br />

anomaly beneath the resistive siliceous porphyry dome(?) as interpreted on line<br />

9965N at around 13000E (see Geiger et al., 2005).<br />

Figure 9. Soil geochemistry, IP anomaly and stockwork vein distribution at Beruang<br />

Kanan South Zone (Geiger et al., 2005) showing the location <strong>of</strong> two holes drilled by<br />

Oxiana <strong>Limited</strong>.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


16<br />

___________________________________________________________________________________<br />

Baroi<br />

The Baroi prospect is located within the southwestern part <strong>of</strong> the <strong>KSK</strong> <strong>COW</strong> (Fig. 1)<br />

and is hosted within an 8 km wide circular feature which is interpreted as a caldera<br />

structure. The main lithologies at Baroi include andesitic volcanics which have been<br />

intruded by monzonite and dacite porphyry intrusions at the margin <strong>of</strong> a large<br />

granodiorite pluton. The alteration and mineralization explored to date occurs in the<br />

southern part <strong>of</strong> the circular structure where it is intersected by regional NE and NNW<br />

oriented structures. The Central Zone and the Far East Zone have been the focus <strong>of</strong><br />

exploration to date.<br />

Mineralization in both the Central and Far East Zones is hosted by northwest and<br />

north northwest-trending veins up to 10 metres wide. The veins typically contain<br />

chalcopyrite, galena and sphalerite together with quartz and chlorite. Hole BF05<br />

drilled 83 metres down the dip <strong>of</strong> one such vein and returned 2.64% Cu, 0.62% Pb,<br />

1.85% Zn and 61 g/t Ag and 0.22 g/t Au. SRK considered that the vein density is not<br />

high enough to form a significant resource (Munroe and Clayton, 2006) however, they<br />

may ultimately <strong>of</strong>fer small volumes <strong>of</strong> high grade material to supplement other ore<br />

sources. Deep drilling at the Far East Zone (to 600 metres) has not indicated the<br />

presence <strong>of</strong> shallow porphyry style mineralization beneath the vein system.<br />

Veins similar to those at Far East also occur in the Central Zone where a number <strong>of</strong><br />

short holes have intersected a series <strong>of</strong> subparallel veins with Zn ≥ Pb ≥ Cu. The<br />

predominance <strong>of</strong> sericitic and argillic alteration coupled with the presence <strong>of</strong> these<br />

base metal veins in the Central Zone is consistent with the exposed material<br />

representing the outer/upper parts <strong>of</strong> a porphyry system.<br />

Oxiana <strong>Limited</strong> Drilling<br />

Oxiana drilled two new holes at Baroi, one in a conceptual target in Central Baroi<br />

originally defined by Burke (1996) on the basis <strong>of</strong> coincident magnetic and resistivity<br />

anomalies flanked by conductivity highs, and the other in the Far East Zone in an area<br />

<strong>of</strong> weakly anomalous copper and gold geochemistry.<br />

KBC009 in Central Baroi was drilled to a depth <strong>of</strong> 542.6m without intersecting<br />

significant mineralization. The presence <strong>of</strong> unaltered carbonaceous shale underlying<br />

andesitic volcanics was believed to explain the resistivity contrast.<br />

KBF0050 in Far East Baroi intersected several quartz-chalcopyrite-pyrite-chlorite<br />

veins which were thought to be up to 0.5m wide. Significant intercepts comprise<br />

(Stewart et al., 2007):<br />

• 14 metres @ 1.61 ppm Ag and 1710.57 ppm Cu (from 30 metres);<br />

• 30 metres @ 0.12 ppm Au, 7.11 ppm Ag and 6586 ppm Cu (from 56 metres);<br />

• 6 metres @ 0.11 ppm Au, 6.73 ppm Ag and 5223.33 ppm Cu (from 112.00<br />

metres).<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


17<br />

___________________________________________________________________________________<br />

Discussion<br />

The conceptual target in Central Baroi proposed by Bob Burke on the basis <strong>of</strong><br />

geophysical data was tested by KBC009. Reprocessed IP data led Rowston (2007) to<br />

downgrade the significance <strong>of</strong> this target because <strong>of</strong> the low chargeability in the<br />

central part. Even though the hole appears to have stopped short <strong>of</strong> the central part <strong>of</strong><br />

the target, it does appear to have intersected the marginal chargeability anomaly<br />

flanking the central zone which was envisaged as a <strong>potential</strong> pyrite-rich shell. No<br />

significant mineralization was present in the hole and the amount <strong>of</strong> pyrite was<br />

generally low. The drill hole did intersect several zones <strong>of</strong> milled breccia containing<br />

pyrite and silica-pyrite fragments, but the lower part <strong>of</strong> the hole was composed <strong>of</strong><br />

carbonaceous shale. The lack <strong>of</strong> strong pyrite development and the presence <strong>of</strong><br />

carbonaceous shale suggest that the target should be downgraded.<br />

Two further targets in central Baroi proposed by Pollard (2006) were not drilled<br />

despite receiving support from the reprocessed IP data (Rowston, 2007). The large<br />

high chargeability feature observed on the old level 7 chargeability data on the<br />

western side <strong>of</strong> Baroi Central could represent a zone <strong>of</strong> sulphide mineralization above<br />

a buried porphyry intrusion (Geiger and Prasetyo, 2004). Although this was partially<br />

tested in BC-08, a further hole was suggested via drilling the proposed hole BC-09 on<br />

line 30600N (Geiger and Prasetyo, 2004; Pollard, 1996). Based on the reprocessed IP<br />

data, Rowston (1977) supported drilling a 400m vertical hole in this conductive,<br />

chargeable feature at 30600N and 45800E.<br />

The resistivity low and chargeability high located near 30800N and 48200E, was also<br />

proposed as a target worth drilling by Pollard (2006). This area is a gap in the mapped<br />

NW-trending base metal vein system and is associated with a topographic low. It is<br />

<strong>potential</strong>ly the centre and source region <strong>of</strong> the vein system and it was recommended<br />

(Pollard, 2006) that all drill hole data from the eastern sector (Baroi Far East) be<br />

examined for temperature vectors (trends in ratios <strong>of</strong> Zn/Pb, Cu/Zn, etc.) toward this<br />

area. If present, they would support drilling a deep hole to test for mineralization<br />

linked to a deeper porphyry, possibly associated with sericitic alteration similar to that<br />

reported from holes BB-01 and BB-02. Rowston (2007) also advanced this area as a<br />

target based on the reprocessed IP data.<br />

KBF0050 confirmed previous interpretations that shallow porphyry style<br />

mineralization is not present beneath the vein system at Far East Baroi.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


18<br />

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Mansur<br />

The Mansur prospect is located in the northwestern portion <strong>of</strong> the <strong>KSK</strong> <strong>COW</strong> within a<br />

circular topographic feature and associated strong magnetic anomaly. Surface<br />

mapping indicates the presence <strong>of</strong> a diorite intrusion within a sequence <strong>of</strong> sediments<br />

that includes siltstone, sandstone and chert. Potassic alteration in the form <strong>of</strong> biotite ±<br />

magnetite alteration and/or K-feldspar veins and alteration forms a broad zone<br />

extending more than 500 metres east and west <strong>of</strong> the diorite within the sedimentary<br />

sequence. A semicircular zone <strong>of</strong> >500 ppm Cu in soils extends around the western<br />

side <strong>of</strong> the diorite (Fig. 10) within the zone <strong>of</strong> potassic alteration.<br />

Previous drilling at Mansur had focused on the gold in soil anomaly which occurs<br />

mainly within the diorite and this returned mostly low grade values for copper and<br />

gold (e.g. CSM1 – 250m @ 873ppm Cu and CSM3 – 250m @ 1180ppm Cu and 0.06<br />

g/t Au; <strong>KSK</strong> Staff, 2006). Trenching over the Cu in soil anomaly produced low<br />

copper and gold values (70-1210 ppm Cu and


19<br />

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Figure 10. Soil geochemistry and drill hole location at the Mansur Prospect (from<br />

Johansen, 2997).<br />

Discussion<br />

The new drilling at Mansur appears to have downgraded the prospect and the chance<br />

<strong>of</strong> discovering an economic porphyry system in the area defined by the soil copper<br />

anomaly is now considered to be low. The new holes together with the earlier Cyprus<br />

Amax holes (CSM1 – 250m @ 873 ppm Cu and CSM3 – 250m @ 1180 ppm Cu and<br />

0.06 g/t Au) have effectively tested this area without intersecting significant widths or<br />

grades <strong>of</strong> mineralization.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


20<br />

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Beruang Tengah<br />

The Beruang Tengah prospect is hosted within the same circular structure and<br />

southeast <strong>of</strong> Beruang Kanan (Fig. 4). <strong>Copper</strong>-gold mineralization is hosted within<br />

dioritic to dacitic intrusions that were emplaced between sediments and tuffs to the<br />

west and older granodiorite to the east. A zone <strong>of</strong> intense quartz-sericite alteration and<br />

sheeted sulphide-quartz veins surrounds a central zone <strong>of</strong> biotite-magnetite alteration,<br />

and quartz stockwork veins crop out at lower levels (Geiger and Prasetyo, 2004). A<br />

400 metre wide zone <strong>of</strong> >0.1% copper in rock chips (Fig. 11) coincides with the zone<br />

<strong>of</strong> quartz-sericite alteration. Some 500 metres to the west, a 1 km long zone <strong>of</strong> phyllic<br />

alteration coincides with a zone <strong>of</strong> >0.1 g/t Au in soils (Geiger and Prasetyo, 2004).<br />

Three previous diamond drill holes intersected low-grade copper-gold mineralization<br />

at Beruang Tengah (e.g. BT2 – 240 metres @ 0.19% Cu and 0.12 g/t Au) and together<br />

with the mapped alteration at surface, have indicated the presence <strong>of</strong> a porphyry<br />

copper-gold system with significant molybdenum.<br />

Oxiana <strong>Limited</strong> drilling<br />

Oxiana <strong>Limited</strong> drilled one additional hole at Beruang Tengah which targeted high<br />

copper in rock chips (Fig. 11), known phyllic alteration, as well as an outcropping<br />

milled breccia. The hole returned low values <strong>of</strong> copper and gold (Table 4), especially<br />

in the milled breccia which from observations <strong>of</strong> the skeleton core is a post-mineral<br />

feature.<br />

Drill hole From (m) To (m) Cu (%) Au (g/t) Mo (ppm)<br />

KBT 004 19.7 121.0 0.12 0.2 42<br />

KBT 004 232.2 507.5 0.08 185<br />

Table 4. Mineralized intercepts in KBT004 at Beruang Tengah.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


21<br />

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Figure 11. Rock chip copper geochemistry and location <strong>of</strong> drill holes at Beruang<br />

Tengah (from Johansen, 2007).<br />

Discussion<br />

The new drilling at Beruang Tengah has significantly downgraded this part <strong>of</strong> the<br />

system and Oxiana considered that there was insufficient room remaining within the<br />

prospect for an economic porphyry deposit.<br />

The Beruang Tengah prospect area has been defined from rock chip sampling <strong>of</strong> creek<br />

outcrops rather than by a broader soil sampling program. It is considered that followup<br />

work is warranted aimed at more fully delineating the extent <strong>of</strong> veining and<br />

mineralization and identifying sulphide-rich parts <strong>of</strong> the system. Stockwork and<br />

sheeted veins with limonites after sulphides extend to the south and west beyond the<br />

copper anomaly that has been the focus <strong>of</strong> recent work (Geiger, pers. comm., 2008).<br />

Extension <strong>of</strong> the geochemical coverage into these areas via a soil survey together with<br />

an IP survey over the main copper anomalies may serve to highlight sulphide-rich<br />

parts <strong>of</strong> the system for follow-up drilling. Given the observed association <strong>of</strong><br />

secondary biotite and magnetite in several <strong>of</strong> the <strong>KSK</strong> prospects, reprocessing <strong>of</strong> the<br />

existing ground magnetic data and extension to the new soil grid may also serve to<br />

better highlight structure and alteration distribution.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


22<br />

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Tumbang Huoi<br />

The Tumbang Huoi prospect is located within a large circular structure in the<br />

southwest part <strong>of</strong> the <strong>KSK</strong> <strong>COW</strong> (Fig. 2). Mapping and sampling were undertaken in<br />

the latter part <strong>of</strong> 1987 and 15 short holes were drilled in 1992 primarily focused on<br />

gold. Potassic alteration characterized by veins and wispy trails <strong>of</strong> biotite ± magnetite<br />

and veins with K-feldspar ± quartz is present in several drill holes and copper in soil<br />

anomalies are present in several parts <strong>of</strong> the prospect (Fig. . Further work perhaps<br />

involving extension <strong>of</strong> the soil grid, together with IP and ground magnetic surveys is<br />

needed in order to highlight possible sulphide-rich parts <strong>of</strong> the prospect.<br />

Figure 12. <strong>Copper</strong> in soil map <strong>of</strong> the Tumbang Huoi prospect.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


23<br />

___________________________________________________________________________________<br />

Conclusions<br />

This brief review <strong>of</strong> recent exploration <strong>of</strong> the major porphyry copper prospects within<br />

the <strong>KSK</strong> <strong>COW</strong> in Central <strong>Kalimantan</strong> indicates that several <strong>of</strong> these systems still have<br />

untested <strong>potential</strong>. In particular, the Beruang Kanan Main and South Zones and the<br />

Baroi Central prospect have untested drill targets that were proposed in earlier work<br />

by <strong>KSK</strong> staff and external consultants. The Baroi targets were also supported<br />

following reprocessing <strong>of</strong> the IP data during the Oxiana joint venture.<br />

Several other prospects within the <strong>KSK</strong> <strong>COW</strong> including Beruang Tengah, Tumbang<br />

Huoi, and Beruang West require further field inspection, geochemical sampling and<br />

geophysical work in order to define targets for further exploration. Other prospects<br />

not considered here including Rinjen and Mamuring also require further work,<br />

especially to assess the <strong>potential</strong> for high-grade skarn-style mineralization at<br />

Mamuring.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


24<br />

___________________________________________________________________________________<br />

Acknowledgements<br />

The author would like to acknowledge the help provided by <strong>KSK</strong> staff in<br />

Palangkaraya, especially Mansur Geiger, Didik Prasetyo and Rachmat Setiawan<br />

References (including uncited reports)<br />

Corbett, G.J. and Leach, T.M., 1998. Southwest Pacific rim gold-copper systems:<br />

structure, alteration and mineralization. Society <strong>of</strong> Economic Geologists Special<br />

Publication No. 6, 236p.<br />

Geiger, M. and Prasetyo, D., 2004. Appraisal and exploration summary: Baroi and<br />

other significant prospects, <strong>KSK</strong> Contract <strong>of</strong> Work, Central <strong>Kalimantan</strong>, <strong>Kalimantan</strong>,<br />

Indonesia. Unpublished report to P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

Geiger, M., Prasetyo, D. and Setiawan, R., 2002. Sungai Mansur data review.<br />

Unpublished report to P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

Geiger, M., Prasetyo, D. and Setiawan, R., 2005. Beruang prospects exploration<br />

summary. Unpublished report to P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

Geiger, M., Prasetyo, D. and Leach, T., 2002. Porphyry copper-gold systems in<br />

Central <strong>Kalimantan</strong>. Prospectors and Developers Association <strong>of</strong> Canada Annual<br />

Convention, 2002, 16p.<br />

Johansen, G., 2007. Report on the geology and copper <strong>potential</strong> <strong>of</strong> the <strong>KSK</strong> JV<br />

tenements in Central <strong>Kalimantan</strong>. Oxiana <strong>Limited</strong> report No. 1140.<br />

<strong>KSK</strong> Staff, 2004. Beruang drilling report: Drill hole summary and sections including<br />

Beruang Kanan, Beruang Tengah, Hulu Beruang Kanan <strong>Gold</strong> Zone, Beruang Kanan<br />

Polymetallic North. Unpublished report P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

<strong>KSK</strong> Staff, 2006. Sungai Mansur exploration program 2006. Unpublished report to<br />

P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

Leach, T., 2001. Comments on exploration activity at the Beruang Kanan porphyry<br />

copper prospect, Central <strong>Kalimantan</strong>. Unpublished report to P.T. <strong>Kalimantan</strong> Surya<br />

Kencana.<br />

Murphy Geological Services, 2003. Interpretation <strong>of</strong> aerial photographs, Landsat<br />

ETM+ and Radarsat imagery for an area in Central <strong>Kalimantan</strong>. Unpublished report to<br />

P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

Olii, U., 1999. Report on Tumbang Huoi prospect, Upper Kahayan River, Central<br />

<strong>Kalimantan</strong>, Indonesia. Unpublished report to P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

Omer-Cooper, W., 1990. P.T. Pancaran Paringa <strong>Kalimantan</strong> Riah Janda Contract <strong>of</strong><br />

Work: Tumbang Huoi gossan, Unpublished report 4p and appendices.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>


25<br />

___________________________________________________________________________________<br />

Pollard, P.J., 2006. <strong>Copper</strong>(-gold) prospects within the <strong>Kalimantan</strong> Surya Kencana<br />

Contract <strong>of</strong> Work, <strong>Kalimantan</strong>, Indonesia: Review and recommendations for future<br />

exploration. Unpublished report to <strong>Kalimantan</strong> <strong>Gold</strong> <strong>Corporation</strong> <strong>Limited</strong>.<br />

Prasetyo, D., 1999a. Drilling data: Beruang Tengah porphyry copper-gold.<br />

Unpublished report to P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

Prasetyo, D., 1999b. Drilling data: Mamuring porphyry-related copper-gold veins.<br />

Unpublished report to P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

Prasetyo, D. and Setiawan, R, 2001. Drill holes summary BK-11 to BK-18 Beruang<br />

Kanan Prospect. Unpublished report to P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

Richardson, J., 1996. PT Cyprus Amax Indonesia: Mansur Project Central<br />

<strong>Kalimantan</strong>, Exploration Summary March 15 – September 15, 1996, vol. 1.<br />

Unpublished report.<br />

Rowston, P., 2007. <strong>Copper</strong>-gold porphyry prospect geophysics Baroi Central/East,<br />

Central <strong>Kalimantan</strong>: Modeling and interpretation report. Unpublished report by<br />

Geophysical Resources and Services Pty. Ltd.<br />

SRK Consulting, 2006. Competent person’s report on the mineral exploration assets<br />

<strong>of</strong> <strong>Kalimantan</strong> <strong>Gold</strong> <strong>Corporation</strong> <strong>Limited</strong>. Unpublished report to <strong>Kalimantan</strong> <strong>Gold</strong><br />

<strong>Corporation</strong>.<br />

Stewart, A., Smith, S., Hamid, D. and Muryanto, A., 2007. 2007 exploration report<br />

KGC <strong>COW</strong> project, Central <strong>Kalimantan</strong>, Republic <strong>of</strong> Indonesia. Oxiana <strong>Limited</strong><br />

report No. 1141.<br />

Wake, B. and Setiawan, R., 2006. Baroi Prospect, Baroi Far East Zone deep diamond<br />

drilling report (interim). Unpublished report to P.T. <strong>Kalimantan</strong> Surya Kencana.<br />

___________________________________________________________________________________<br />

Peter J. Pollard<br />

<strong>Copper</strong> <strong>potential</strong> <strong>of</strong> <strong>KSK</strong> <strong>COW</strong>, Central <strong>Kalimantan</strong>

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